Rio Tinto says lithium boom is cooling, for now
Rio Tinto has hinted that a three-year boom in lithium prices is coming to an end, but unlike its old rival BHP, the company says predicted supply shortages will ensure strong “market fundamentals” for the battery mineral longer term.
Rio’s rising focus on lithium has included an expansion of its hard rock exploration work in Western Australia and Canada while it tries to use a new type of resin to extract lithium from briny groundwater at Argentina’s Rincón project.
Rio sharpened its market commentary on lithium demand on Tuesday, observing “slowing electric vehicle sales growth trajectory and inventory build through the supply chain”. Getty
Lithium prices soared to record levels over the past three years as carbon-conscious government stimulus underwrote strong demand for the lithium-ion batteries that power electric vehicles.
The surge in demand came as lithium miners struggled to recover output rates that were curtailed during the severe lithium bear market that reigned between mid-2018 and mid-2020.
Prices for the lithium-rich spodumene concentrate exported by Australian miners surged from about $US400 a tonne in September 2020 to $US8000 a tonne in the spot market in January. At $US8000 a tonne, Australian spodumene concentrate was fetching about eight times more than prices witnessed in the first lithium boom between 2015 and early 2018.
But prices for all lithium products have declined this year; spodumene concentrate was fetching $US3120 a tonne on October 4, Benchmark Mineral Intelligence said.
Morgan Stanley said Chinese lithium carbonate – arguably the global benchmark lithium price – was fetching $US19,646 a tonne on October 12, down from an average of almost $US32,000 a tonne in the June quarter. Chinese
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